The US’ role in counteracting the global oil curse

How Shell, Eni and
Exxon got embroiled in shady oil deals and corruption scandals around the world
and what the US can do about it.

This week, together with the Carnegie Endowment for
International Peace, Global Witness co-hosted a wide-ranging discussion
on oil corruption, why it matters and how the US government – and companies – can
be part of the solution. Here’s what you need to know (for those who couldn’t
join, you can also check out a recording of the live C-Span broadcast).

The oil, gas and mining industry ranks as the most corrupt
sector on the planet, according
to international statistics. The three panellists – Simon Taylor (Global
Witness co-founding director), Steve Coll (Pulitzer Prize-winning New Yorker
staff writer) and Olarenwaju Suraju (Nigerian anti-corruption and environmental
activist) – all painted a compelling picture of this global problem. Simon
Taylor kicked off the discussion by outlining one of the biggest corruption
scandals in the history of the oil sector: our investigation into the vast 1.1 billion-dollar bribery scheme that
Shell took part in – a deal that robbed the Nigerian people of money that
should have gone to building schools, hospitals and infrastructure. Leaked
Shell emails show that senior Shell executives knew that their money would likely
be used to pay off top Nigerian officials – yet, they still proceeded with the
deal. The case is progressing through the Italian and Nigerian courts with
Shell, Italian oil giant Eni and Eni’s most senior executives facing trial on
bribery offences on what could become the biggest corporate corruption trial in
history.

Leading US journalist Steve Coll, who has extensively investigated
ExxonMobil, placed this Nigeria case within
the larger picture of oil geopolitics, drawing on his reporting in Chad and
Equatorial Guinea. Nigerian anti-corruption activist Olarenwaju Suraju
underscored that corruption in Nigeria should not be blamed on corrupt Nigerian
public officials alone – it could not happen without malfeasance by foreign
corporations like Shell and Exxon; bribery takes two to tango. He outlined an
ongoing corruption
investigation into ExxonMobil’s renewal of three major oil licenses in
Nigeria at a fraction of the price its
Chinese competitor was offering to pay.

Suraju also argued that corruption should be recognized as a
central factor in the rise of terrorist movements like Boko Haram – the funds
that are lost to corruption could have built schools and paid for education for
the scores of Nigerian children who instead joined these movements.

So what are the solutions to this global oil corruption
curse? Simon Taylor called for more meaningful legal accountability in cases
such as the Shell scandal, rather than the status quo where corporations
routinely negotiate favorable agreements with prosecutors to pay fines that are,
at best, seen as merely a cost of doing business.

This is hardly a coincidence. As Taylor pointed out, both of
these transparency measures have been actively opposed and undermined by
ExxonMobil, including specifically by its former CEO and current US Secretary
of State Rex Tillerson. Carnegie expert Sarah Chayes, who moderated the discussion
and studies the rise of kleptocratic networks around the world, remarked that
Tillerson’s appointment as US Secretary of State raised concerns for her
because it signalled a dangerous overlap of public and private sectors that she
sees in other countries she has studied, like Honduras and Azerbaijan.

Indeed, while we have seen Tillerson’s
performance in his new post to be both underwhelming and alarming, we have also
seen that Big Oil interests are getting their way in gutting key US anti-corruption
and environmental measures. These rollbacks of key measures make America an
outlier and laggard, after years of global leadership. This can only serve to hurt
US interests – as Steve Coll remarked with reference to climate change:
whatever America does won’t change global public opinion, and we’ll eventually
have to catch up with the rest of the world.